Since I'm not at the Microsoft Professional Developer's conference, I decided to answer questions by attendees about stuff that I am directly or indirectly responsible for right here. So let's roll the questions out

Alan Dean writes

• You can leverage the XML support in .NET against a data source of your choice (for example, the Registry) by implementing a new XmlReader. We were pointed to work by Mark Fussell on MSDN to do this (Writing XML Providers for Microsoft .NET).
  
  In Whidbey we will be encouraging people to implement custom XPathNavigator instances instead of custom XmlReaders unless their situation specifically calls for forward-only processing. The ObjectXPathNavigator is an example of a custom navigator
  
  
• Tim indicated that the whitespace handling had been particularly useful in the field. He mentioned a gotcha with empty elements; namely that this
  <elementName></elementName>
  is actually the same as this
     <elementName>
   </elementName>
  except that the second has been pretty-printed with a CRLF and some whitespace indentation. The only way to handle this correctly in your XmlReader, however, is to use _reader.WhitespaceHandling = WhitespaceHandling.None
  
  This is a legacy from what I like to call our "unconformant by default" era which is how we shipped the XML parser in v1.0 and v1.1. There were a couple of nice features like not erroring on invalid characters and the above feature that people needed in some cases but shouldn't have been the default behavior since it was extremely difficult to figure out how to turn of all the features and get a conformant XML 1.0 parser. In v2.0 we're going to a "conformant by default" mode where people have to go out of their way to read in unconformant XML not the other way around.
  
  
• The current pain suffered by not being able to CreateElement independent of an XmlDocument which led to the ImportNode hack to allow movement between documents. They were sufficiently noisy on this to lead me to think that this is resolved in Whidbey.
  
  To my knowledge this behavior will remain the same in Whidbey.
  
  

Kirk Allen Evans writes

There will be another, more difficult, XML parser, and you will hear Mark Fussell talk about that later this week.“ - Don Box

I would hedge bets that this revolves around XQuery or something, I am looking forward to hearing what this is.

I am extremely curious about what this means myself but don't think Don was talking about XQuery. If anything he probably was talking about APIs but even then we aren't changing much from what we provided in v1 in the area of the XML parser (i.e. the XmlReader class) although the implementation has been rewritten to be faster and more conformant (much props to Helena). I am puzzled about what Don meant by that statement since I've seen Mark's slides and there really isn't anything about another XML parser that users have to learn. Perhaps he meant another XML API which is valid given that we did a ton of work on the XPathDocument for v2.0 which means there may be a lot of people moving from using XmlDocument to using XPathDocument for a number of reasons.